22 August 2004	Sunday	05 Rajab 1425

KARACHI: The reforms introduced by the Security and Exchange Commission of Pakistan during the last two years have not only restored transparency in share trading but also improved investor confidence.

"We have done away with herd culture in the share business", claims the Managing Director of the KSE, Arif Habib, adding: "About 300 per cent increase in the KSE 100-share index over the last two years eloquently speaks of the investor confidence".

An average rate of return on investment in stock ranges from 6.5 to 11 per cent, which is still higher than any other prevailing mode of investment that reflects "money goes where it is safe and appreciates", he says.

"Long queues of small and big investors on the bank counters to invest in the newly floated shares of renowned companies indicate their enthusiasm," leading analysts say.

Some of the recently floated Initial Public offerings (IPOs), notably of Alfalah Bank, OGDC and Pakistan Petroleum, have broken all previous records both in number and the subscribed amounts, they said.

Apart from handsome capital gains, some leading companies notably PSO, Shell Pakistan, Fauji Fertilizer, Dawood Hercules, International Industries, Siemens Pakistan, Rafhan Maize Products and Al-Ghazi Tractors have announced higher cash dividends plus bonus shares ranging from 100 per cent to 300 per cent.

The rate of payouts by some others whose floating stock is in the hands of sponsors or directors is much higher than the above mentioned figures.

The KSE chairman holds the same view about the astounding performance of the stock market, which has surpassed all previous records both in terms of single-session volume at one billion shares and market capital at $25 billion.

Foreign investors may still be a bit shy but there were other inhibiting factors rather than trading conditions, which did not allow their massive presence.

"Many investors have become overnight multi-millionaire who were guided to the shares having potential of capital appreciation or good dividend records since the current boom overtook the market", brokers said.

"The market is poised to enter the second boom era after Shaukat Aziz takes over as prime minister, possibly by the next week as stock investors hope he is the only "person who can guide the market to its next target of 6,000 index level".